Everything You Need to Know Before BIP 110 Activates | Luke de Wolf

Summary

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Market Disruptors: “Everything You Need to Know Before BIP 110 Activates” | Luke de Wolf

Air Date: August 8, 2026
Host: Mark Moss and Jake Roque
Guest: Luke de Wolf (cybersecurity professional, Bitcoin educator, author of “Defending Bitcoin”)

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Episode Overview

This episode dives deeply into the upcoming activation of BIP 110—a pivotal and contentious proposed soft fork for Bitcoin. Host Jake Roque leads an expansive, honest conversation with guest Luke de Wolf, a cybersecurity expert and author, covering not only the technical, philosophical, and community aspects of BIP 110, but also broad themes about Bitcoin’s governance, security, and future. The episode explores the ties between meaning, responsibility, and sovereignty (both personal and financial), unpacking the dynamics and tradeoffs as the Bitcoin network stands on the edge of a possible chain split.

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Key Discussion Points & Insights

1. Luke de Wolf’s Background and Perspective

Timestamps: [03:02–15:51]

• Critical Infrastructure & Cybersecurity Roots:
  Luke began working in Canada’s oil and gas sector and transitioned into cybersecurity focused on critical infrastructure (“stuff that controls oil and gas pipelines...” [04:21]). He elaborates on the differences between defending physical versus digital systems.

• Path to Bitcoin:
  Discovered Bitcoin after moving from Canada to Finland during COVID and seeking financial sovereignty. Was initially skeptical, considering it "old tech"—until hearing Robert Breedlove and Jordan Peterson discuss money’s fundamentals.

  • “Rob was speaking my language… He invoked Dr. Peterson… that just got my attention… I was down the rabbit hole...” [07:40]

• Influence of Philosophy:
  Luke entered the space not through price or crisis, but through philosophical inquiry—especially Peterson’s “Maps of Meaning,” and the wider “intellectual dark web.”

  • “Most people find bitcoin through price action… but you came into it through this philosophical frame… I wonder how that changes your approach…” –Host [16:12]
  • “Bitcoin fit into [my search for meaning] as this thing that seems to be the solution to so many of the world’s problems in an elegant way...” [16:50]

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2. Meaning, Truth, and Responsibility in Bitcoin

Timestamps: [13:42–35:46]

• Peterson’s Influence on Life and Bitcoin View:
  • Luke discusses reframing “sin” (not as moral failure but “missing the mark”), and how striving for “the highest good” aligns with the ethos of Bitcoin as truthful money.
  • “Organized religion gave me a better moral compass...aim for the highest good you can conceive of...if you sin, you just didn’t do as well as you could have. Maybe you want to aim for better.” [20:59]
• Honest Money as Societal Good:
  • Discussion of how fiat currency is a “lie,” and Bitcoin's commitment to decentralization is both technological and ethical.
  • “Fiat currency is a lie… Bitcoin is this honest system… one of the most true things…” –Host [33:16]
  • “The purpose of bitcoin has always been to solve the money problem, but it’s gotta be understood from the lens of the cypherpunk history…” [35:46]
• Agency and Individual Impact:
  • “There’s always something one person can do, like, you can always do something to strengthen your security, to strengthen the network’s security…” [44:22]

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3. Bitcoin’s Governance Model: Nodes, Miners, Devs, and Users

Timestamps: [61:03–78:37]

• Definitions & Power Structure:
  • Nodes: Validate/enforce consensus rules (“the nodes enforce the rules… what all nodes agree to…” [61:57])
  • Miners: Secure the network, assemble blocks (“the sum total of work miners are doing is the security… what prevents double spending…” [62:40])
  • Developers: Propose and code changes (“they’re changing node software—very specifically, that’s all that matters…” [67:15])
  • Users: Economic actors, driving value and signaling preference by holding, transacting, and supporting projects.
• Interplay and Checks and Balances:
  • Changes require social as well as technical consensus. Miners may follow profitability, nodes enforce rules, but ultimate legitimacy comes from users (economic “weight”).
  • “Economic weight… if you are representing a lot of traffic, a lot of wealth… you have more effect than a node that just spins up and watches what’s going on…” [72:08]
• Forks as Feature, Not Flaw:
  • “A chain split is just the mechanism for disagreement… part of the design if not necessarily intentional…” [81:40]

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4. BIP 110: Stakes, Risks, and the Path Forward

Timestamps: [78:37–108:50]

• What is BIP 110?

  • A controversial soft fork aiming to set stricter consensus limits on arbitrary data in Bitcoin transactions, especially post-Taproot.
  • Some fear it sets a potentially dangerous governance precedent by being initiated by a well-organized, passionate minority of node runners, rather than broad, organic consensus.

• Arguments and Uncertainties:

  • Governance Concerns:
    • “Any minority could come in and sort of push this through. Yeah, there’s some concern there…” [78:48]
    • Resistance mechanism (“user rejected soft fork” URSF) has not materialized, possibly because “they just don’t take 110 seriously” [83:22]
  • Risk Management:
    • Avoiding a chain split is the least risky option, even if BIP 110 is imperfect in method or implementation.
    • “The smooth activation of 110… that’s the least risky, least chaotic scenario in my view.” [89:50]

• Relation to Previous Upgrades:

  • Lessons from SegWit and Taproot discussed—how much consensus is enough? Is policy-to-consensus fighting justified?
  • “Nodes enforce rules… miners tried to change something, nodes didn’t let them do that…” [95:15]

• If BIP110 Fails:

  • Sets a strong ossification precedent: “Another upgrade… is virtually impossible under current conditions” [102:25]
  • “If BIP110 fails, we should just never change anything.” –Host [102:22]

• Luke’s Position:

  • Though initially skeptical due to process and possible “minority rule,” Luke now supports BIP 110 as the least chaotic, most pragmatic route given current realities.
  • “I’m convinced it’s net positive, but it could have broken a couple fewer eggs…” [86:31]

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5. Security, Practical Takeaways, and BIP 110 Activation Advice

Timestamps: [47:08–105:10]

• Security Tips:
  • “12 vs 24 Words” for wallets: “128 is already astronomically random… You can have less than 12 words and have that be relatively secure, though best practice varies…” [48:59]
• What to Do During Activation:
  • “Don’t transact… Make any transactions you need to make before that… It’ll be solved in about an hour. BIP 110 is never catching up if it doesn’t get signaling immediately.” [105:10]
• On Layer 2 and Future Development:
  • Lightning, ARC, and Liquid are all “unaffected” by BIP 110—limits constrain some directions, but not main monetary uses. [108:50]

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6. Philosophy, Community, and the Bigger Picture

Timestamps: [119:15–End]

• Community Health After the Fork:

  • “If we could find ways to kumbaya, bring everybody back together… I want to hopefully be participating in some of that bridge building afterwards…” –Host [121:00]

• Luke’s Commitment:

  • “I don’t think Bitcoin dies if BIP110 fails… I do think we need to keep going and keep working on this project. I’m the pragmatist. We’ve got to work with what we got.” [121:48]

• Why This Matters:

  • “We are at a fork in the road… are we going to go down the centralized totalitarian surveillance state route…or the hard-fought, painful, but very important battle to maintain decentralized control over… our lives?” –Host [123:53]

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Notable Quotes & Memorable Moments

• “What you put out into the universe is what you get back… There’s so many of these ideas that echo across traditions…” – Luke [30:30]
• “Bitcoin’s purpose is to put the individual back in control… The individual has to take responsibility…” – Luke [44:22]
• “Nodes enforce the rules; miners secure the network; developers propose changes; users are the economic majority. But power is always in interplay.” – Luke [61:45]
• “I’m convinced… BIP110 is net positive. But it could have broken a couple fewer eggs… It could have made some compromises to make it a little more socially acceptable…” – Luke [86:31]
• “It’s funny that it is this way, because you wouldn’t really think that it would be this way. But when you make sacrifices of yourself for the well-being of others, that’s where meaning is found…” – Host [29:43]
• “There’s always something you can do. But stay vigilant—don’t just think that Bitcoin is anti-fragile because some people on X say it is.” – Luke [61:03]
• “Protecting [Bitcoin’s] immaculate conception is a big deal…” – Luke [60:29]

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Important Timestamps

• [03:02–15:51] Luke’s journey: critical infrastructure, Bitcoin, philosophy, and meaning
• [23:47–29:43] Meaning, truth, and the “highest good” in life and Bitcoin
• [35:46–44:22] Cypherpunk history, individual impact, network health
• [61:03–76:54] Bitcoin’s governance mechanics
• [78:37–105:10] BIP110 specifics: risks, game theory, community divides, activation guidance
• [121:00–End] Community healing, next steps, and the battle for financial sovereignty

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Closing & Resources

• Luke de Wolf on X: @lukedewolf
• Defending Bitcoin Book: defendingbitcoin.com
  • A deep-dive into Bitcoin threat modeling, security, and risk analysis.
• BTC Helsinki Conference: September 25th–26th, Helsinki, Finland (btchell.com)

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Parting Thought

"Don’t lose sight of the greater mission here. It’s important and is worth defending—as some people find it important to write books about." – Host [126:24]

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Episode in a Sentence:
A wide-ranging, thoughtful look at the human, technical, and philosophical foundations of Bitcoin as BIP 110 approaches—reminding us that, in the digital age, the battle for honest money is as much about meaning, responsibility, and community as it is about code.

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Transcript

[Podcast Host]

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[Podcast Host]

it is this way, because you wouldn't really think that it would be this way. But when you make sacrifices for the well being of others, that's where meaning is found.

[Luke DeWolf]

You have to take all of the responsibility. But the benefit is you get this way out.

[Podcast Host]

I don't know. I don't like the idea of having to constantly defend against convinced minority positions.

[Luke DeWolf]

There is a resistance mechanism that has not been invoked against bipartisan 110.

[Podcast Host]

Why do you think that hasn't appeared?

[Luke DeWolf]

It's entirely possible that bip 110 ends up failing, ends up splitting off, but it's also entirely possible that they'll convince miners to signal how Bitcoin's governance model works.

[Podcast Host]

What do the nodes do, what do the miners do, and who's in charge?

[Luke DeWolf]

You know, I don't think bitcoin dies if you can clip that if you want, but I don't think that's the case.

[Podcast Host]

Luke DeWolf. Welcome to Market Disruptors, Jake.

[Luke DeWolf]

Thanks so much for having me. I appreciate the invite.

[Podcast Host]

Yeah, I'm excited for this chat. You've been on my radar for a while. We were doing some chatting offline just now, but you strike me as like an intelligent and intellectually honest guy and the kind of guy that I'm grateful to have on the. On the front lines defending bitcoin, as your book is called. And so, yeah, I think you're a smart, good dude to have, and I'm happy to have you grateful to have you doing this. I think first, just for our audience who maybe is new to you and what you're doing in the bitcoin space. If you could walk me through maybe before you entered into bitcoin, you were working as a cybersecurity professional. What you took away from that into the bitcoin space and what you're focused on now.

[Luke DeWolf]

Sure. Well, hey, thanks for the intro. I appreciate it and I'm flattered and, uh, let's see if I live up to that. But I mean, yeah, I've, I've tried to stay in my lane a little bit in the, the bitcoin space and only just recently started to get a little more out there with, with bringing some of my past experience into things and. Well, we were talking offline, as you say. I'll, I'll, I'll weave this in, but I have a, I have a little interesting connection to, to Robert Breedlove and Jordan Peterson and things like this. So some, some figures that are maybe a little lightning rod ish in various communities, but yeah, I'll get to that. So. So answering your question, yeah, I started in the. Well, in the critical infrastructure space, working in the oil and gas sector in Canada. That's how I started my career. And about midway through, after a few years, I switched to doing cybersecurity in that space. And I mean, this is the stuff that controls oil and gas pipelines, also a bunch of other types of control systems, oil and gas sector, gas wells, things like this. So I got to know quite a bit about how this stuff works in the real world and how stuff is different when it's touching the physical world as opposed to when it's, when it's just dealing with computers. Something like this, you can have real physical consequences. If something is say controlling the amount of gas that's going through a pipe, you over pressure that and that can get pretty explosive pretty quickly. So yeah, there's real consequences to this stuff is basically the takeaway there. But there's a more meta thread that, that critical infrastructure is the type of thing that we depend on for every aspect of our society. That's things like making sure that the water is, is running when you turn on the tap, electricity is flowing when you turn on the light and heat. All this other stuff that there's, there's food in grocery stores, there's, there's the ability to make payments. Right. That's considered a critical infrastructure pretty much universally. So the way we think about and defend these types of systems is just different from how you defend your email or something like that. And so taking that into the bitcoin space was something that I only just realized was a possibility. I'm getting ahead of myself a little bit. I got into bitcoin in the process of moving from Canada to Finland, which is another thread of my life. I'm from Alberta, the province in Canada where the oil and gas sector really has its, its center, its base. There's oil and gas in other parts of Canada, but Alberta is the, the headquarters pretty much universally and, and that has a lot of challenges that that province has, has felt a lot of say, hate from or pressure from the rest of the country, a lot of dislike that the main industry is, is this oil and gas. Right? It's, it's not climate friendly, all this sort of thing. Justin Trudeau was very anti Alberta or at least very anti Alberta industry. So it was just tough and I was lucky enough to get the opportunity to, to move. I got a job offer and I'd wanted to live abroad and fairly specifically in the, in the Nordics. Norway was the other country I was considering my wife and I, but, but Finland gave me the opportunity and this was all in the middle of COVID and in the middle of. Well, bitcoin crypto was going on a run. So I was looking for ways to where do I put my money? I, I, instead of like the, the traditional investment funds, things like this, I have to move my money out of Canada. How do I do that? So I'm thinking about all this and then well, one day I see Robert Breedlove on the Lex Friedman show. That's, that's one of the Podcasts that, that, you know, I still. I still listen to from time to time. He's not putting out that much content these days, but for. For a while there it was Joe Rogan, Jordan Peterson, Lex Friedman, that, that I would have on almost every episode, something like this. So that gives you an idea of. Of who was rattling around in my head a little bit at that point. But yeah, so, Robbie. Yeah, totally. Good. Good set, right? Yeah. So. So Rob goes on, on Lex Friedman, and he's speaking my language. And, and there have been a few other people on Crypto people. First of all, I can't. I can't even remember who affiliated with this coin or that coin. And at that point I thought that it was a good strategy to like that, diversify, right, to hold a bunch of different coins, see which one is going to do. Well, whatever. I actually was completely discounting bitcoin at that point. I had no idea that I thought it was just the old tech and something better must have come around. All of the usual things, right? But there was Pomp, Anthony Pompliano, Nick Carter, and both of those guys were pretty much only talking about bitcoin to their credit. I mean, both of them sometimes get branded as being shitcoiners or whatever, but yeah, they were talking only about bitcoin. And I mean, that was interesting. But Rob was speaking my language. He invoked Dr. Peterson, Jordan Peterson, multiple times. And that just got my attention. The whole intellectual dark web, if you want to call it that subculture, that was very taboo at the time, at least in my circles. It wasn't good to be saying that you were a fan of those folks, influenced by their ideas and whatnot, political correctness and. Yeah, so. So I just resonated and I knew I had to go learn more sailor series. And I mean, that's it. That. That got me. I must have watched that three or four times in succession. And I mean, I mean, that says a lot about. About there's maybe even a certain era of bitcoiner where listening to discussions about. About money, monetary theory. Sort of boring if you haven't thought about it, but I was just fascinated. And I mean, I mean, Saylor cites Safedin and then basically almost goes verbatim through a few chapters of the bitcoin standard in that series. And. But it was just fascinating to me how you could think about money and the implications. And so that just got me. And I was down the rabbit hole, but by this point I'd moved. I wasn't full maxi yet, but it didn't take long. And then I just wanted to contribute. I wanted to find some way to contribute in the space. I found a publisher or publisher translator. At the time they were a little more translator heavy books into various languages, including Finnish, which my target. I was trying to get better at the Finnish language and I wanted to read bitcoin stuff in. In that language. And so I found them. I. I thought hey, they, they sent a. They sent a post, put out a post asking for. For marketing help. And I, I sent them a message. I say I'd be doing podcasts for a few years. Nothing bitcoin related, of course. But if. If you're interested to see what I was up to before, before bitcoin, there's still the Northern Myths podcast out on YouTube where I talked about Norse Finnish mythology and this sort of thing for a while. So that was. That was fun. From a Jordan Peterson type angle. That was. That was the entire point of that thing.

[Podcast Host]

What year was. Was that that you're doing that? Oh wow.

[Luke DeWolf]

Seven, 2017 to. To 2020 essentially. Maybe. Maybe we started 2018, but. But yeah, yeah, yeah. Not a lot of, not a lot of output, but yeah, yeah. Or early on when.

[Podcast Host]

Early when did you read Maps of Meaning too? We'll talk about more about that later or maybe soon. Yeah, that.

[Luke DeWolf]

No, that, that was a question Rob asked me to actually back. So I mean skipping ahead slightly was. Was. Was that I ended up doing yeah. Series on. On Jordan Peterson's Maps of Meaning with. With. With Rob on the what Is Money Show. And I mean that was surreal. That was. That was super cool that he. That he invited me to do that and because that was the book that he had invoked that. That got me down the rabbit hole and everything. So that was just really cool. I. I think it was. It was 2016, 2017 time was. Was when I read Maps of Meaning. I'm probably just mixing up years a little bit. It's a while ago now, but. But yeah, it was. It was back when Jordan Peterson was like really in the Zeitgeist a little bit and controversial of course. And he. He, well got on my radar and I loved his lecture series. I consumed basically every piece of content that he. That he put out multiple times.

[Podcast Host]

And you list the, the Genesis series and the. Yeah, that was. I think. I still think that's probably his. His greatest work that he's done is that series. But the. His Maps of Meaning course at University of Toronto, the 2017 one and the 2017 personality and it's. What's that course called Personality. And it's something.

[Luke DeWolf]

Yeah, exactly. And it. So it must have been like late 2017, early 2018, because those courses were out, but they were fresh. Yeah, yeah. And then he was just doing that Genesis series and I agree with you. I think that's, I think that's the best content he's, he's put out. And I mean you can think of, you can think of the guy, whoever you like, but he helped me a lot, a lot to figure out how I wanted to live my life, how I wanted to be an adult. So it really helped. Yeah, exactly.

[Podcast Host]

Yeah. I can't stand this thing that I notice on the Internet where someone can do, be so helpful, do so much good, nail so much stuff and they miss like a thing, they miss two things, you know, and everyone just piles on pounds into the ground and it's like, bro, like, if all of your mistakes for the past 15 years were broadcasted to the Internet, like it would not be hard to find. You know, I just hate this idea of like judging people by like their biggest mistakes, you know, or their, the goofiest things they've said or whatever it is, you know, Like I, you know, I, I got, I could levy some criticisms at Peterson for sure, but like the, you know, net like contribution to humanity and society is like, you know. Yeah, there's. I don't know. Yeah, I think that we need to have some like, respect and like respect for those who have done great things and compassion and empathy for like, you know. Yeah, nobody's perfect even in this. We're gonna get into the BIP 110 conversation and all this stuff. And I even feel this way about like, oh, you know, some people, they have one. Whether you agree or disagree with it is not even my point. But like, you know, someone will take a stance on the other side and it's like you are like totally an evil person now, you know, and it's like, I just, we can't, you know. Yeah, we, I think we need, that's one thing we need to defend against, I guess.

[Luke DeWolf]

Yeah. And I mean. Yeah, not to jump around too much, but I had, I had one case where, where someone who I liked, I liked their content on X. I didn't know them personally. They were, I think semi nim or something like this, but unfollowed me because I didn't have one same opinion. And we agreed on virtually everything else and it was just like, ah, come on, like you're gonna be like that. Like really, why you unfollow Someone or you block someone or whatever just because you disagree about one thing. I've got tons of people in the bitcoin space that I follow, who follow me that I don't agree with that are on opposite sides of the big issue, the bit 110 thing. And it's like, come on, we can talk, we can get along, but we can get into that a little more later. But, yeah, I just agree with you on that point.

[Podcast Host]

Yeah. I'm going to skip ahead from what I told you before. Let's just dive right into the Jordan Peterson stuff while we're on it. So, yeah, you did this series. I remember I listened to chunks of it back in the day. My producer was talking to me before and he kind of reminded me of some of that stuff. And I was like, that's right. We got to dive into some of that.

[Luke DeWolf]

Awesome.

[Podcast Host]

You said in that series, I think, that maps of meaning led you to bitcoin and how most people find bitcoin through price, action or a personal or, you know, like a financial crisis or something. You know, there's like a catalyst that pulls them in. But you came into it through this philosophical frame, and I wonder if that, you know, obviously you have this cybersecurity background, but you, you were coming in through that. Yeah. Philosophical lens. And I wonder how that changes your approach, you know, like the elements of, like, truth and honesty and all of that sort of stuff, how that contributed to your understanding of bitcoin.

[Luke DeWolf]

Yeah, well, the, the whole thing with it was I, I had really had a focus in, in my life, in, in figuring out what to do with myself, meaning, for lack of a better term. And, and, and the way bitcoin fit into that was. Was just this thing that seems to be the solution to so many of the world's problems in an, in an elegant way. I mean, many of the sort of monetary things that we all talk about in inflation, I just had no idea why that had to exist for a really long time. And then understanding that it's only caused by people taking what they can, essentially, if you give them power and you give them control over. Over money, over the money supply. I just hadn't thought about it before. And so it was, it was almost as. As if something was priming me for, for that. Right. That, that understanding. And I mean, I'm not sure if, if. If my approach was any different. I think, I think specifically it was that maps of meeting Jordan Peterson, all this, and Rob just talking openly about that. If I'm remembering correctly, I think My point was something like that people should. And I mean, that's a strong word, but it's nice if people talk about their influences and their backgrounds and you have a diversity of thought, because that pulls people in from different places. And where I've gone in my bitcoin journey and where I've gotten the most out of it is just trying to grow adoption. Right. And. And telling people really, really simply that. That I just. I think this is worthwhile. It's not about the number go up. Even though it's always nice when number go up. It. It's. It's about taking this. This freedom, this sovereignty, not letting anyone else control you anymore. I. I think big part of my journey, and this is. This is maybe gonna sound a little funny, is that I. I kind of. I thought myself out of religion or organized religion through. Through my explorations of Jordan Peterson's material. Well, so. So I did this podcast, this Northern Myths podcast, and it was basically structurally based on that Genesis series that. That Jordan Peterson did. Right. Same idea. Anyway, it was. It was.

[Podcast Host]

You know, that's interesting, because the opposite happened to me. Well, not. Not the opposite exactly, but that going through that series made me go, you know what? I should like, re. Engage with organized religion more than I. More than I have. So that's. That's interesting. I want to keep hearing why that happened for you.

[Luke DeWolf]

No, yours is probably more common, and I understand and respect why, but I think I really just. I did a number on myself in good and bad ways in terms of just really looking behind the curtain a little bit much. It felt like every little bit of religious story, or even story in general, was something that had this formula, these lessons, and it's not to take anything. It's not to take anything away. In fact, for me, it was more about that the structure of story, kind of myth, narrative boils down to the parts that survive over generations. Right. You might not remember the exact name of the guy who was the hero that one time, but you remember that he was the hero. You might not remember the tiny minutia until writing came around. You might not remember the tiny minutia of exactly what he did, but you remember the broad strokes. Right. Over time. And it's the thing.

[Podcast Host]

Pattern of behavior.

[Luke DeWolf]

Yes. And it's. It's the things that are useful. That's exactly right. It's the things that are useful to remember. They got remembered back when there was only this oral. Oral tradition stuff. Writing changed all of that. And that's. That's, I think, a Big part of, of what Dr. Peterson latches on to in terms of that that Judeo Christian tradition had a, had a major shift in, in terms of that, that it was able to record this stuff a lot differently. Of course there was writing in, in many other cultures, but that was actually part of what kind of brought me in other directions was that I wanted to explore, okay, do other cultures do things the same way similarly? Can we find similar lessons? And I think through that process I kind of just landed on that. I'm really happy to just now live my life for a while and not think about these kind of cosmic questions. I've given myself a better moral compass than I had. One of his sayings is something like aim for the highest good that you can conceive of. And the corollary to that is that sin translating is missing. The mark is really just that you miss the mark of what you're aiming for. And taking out the sort of evangelical Christian, because that's my background originally the evangelical Christian sort of shame of, of that if you sin, you're bad, you're going to hell, whatever, reframing that into, well, you just didn't do as well as you could have. And maybe you want to aim for better. That whole reframing, reflipping completely changed how I thought about life in general in a positive way.

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[Podcast Host]

How do you conceptualize the highest Good. That you can aim at. Like, what is that to you? It's a difficult question. Right. But.

[Luke DeWolf]

Well, I'm going. I'm going to invoke a little bit of a. Well, it. It depends on what you mean by highest good or something like this. I. That's half of a troll. No, like, I got you. It depends on which level of abstraction you're thinking of. I. I'm being semi serious, like in. In a lot of ways, to me, it doesn't make sense to constantly be thinking about that. Like, that, That's. That's maybe how I. How I would conceptualize this right now is that it's not good to be rethinking your aim too often. You can sort of put yourself on a bit of an autopilot towards a big overarching goal. And when you get confronted with things that get in the way of that goal, this is sort of part of. This is straight out of maps and meeting type stuff. And I do recommend listening to the. The lectures are the best. But if you want to hear it from me or bit from the bitcoin perspective, the. The series with Rob, it was a lot of fun. But when you get things that are in the way of your goal, you have to reevaluate. You have to either figure out your way around your problem or you have to reframe your. Your reality, your map of the territory. And so you take that aim, right, this map of the world that you have, and try to find how to get there as efficiently as possible. Figuring out what the aim is is I think the hard part that people me have a hard time with. But I think I landed on something like trying to do the best for the world, but also centered on my family, my local community. And how can I advocate for the things that I believe will do the most good in the world without sacrificing the good for my local circle. Something like that.

[Podcast Host]

Yeah. Yeah. I mean, I realize, you know, as I ask the question, when I think of it, it's like, you know, to me, I think some would say that that could be like a definition for God, I guess, right? Like the highest thing that you can aim at. Like, by definition, God is like the. The good of goods, you know, in the Christian lens, the King of kings, the Lord of Lords, like the. The spirit of spirits, you know, like the ultimate thing. But then also, too, it's in a human lens, in every wisdom, tradition, religious tradition, there's a recognition of the ineffability of that thing. Like the first line of the dao de Ching, excuse my pronunciation, any Mandarin speakers out there, but is the dao that can be known is not the eternal dao. So the way that can be understood is not the eternal way. And so in the Christian lens, it's like the, you know, there's this recognition of God exists out of time, outside of time, outside of, you know, human understanding, essentially. And so there's this way where, whether it's in the Christian lens or not, you fix yourself at the ultimate good while understanding that you do not understand it, you know, I think is, like, helpful because there's a humility in that that I find it's like, okay, that's what I'm aiming at. But at the same time, I recognize that, like, all that I know is not, you know, what I know is not all that I need to know. I don't understand what the. What this thing is. Even though I make a conscious decision to purs it, I know that I don't know it in a total sense. You can touch it, the spirit can graze against your consciousness, so to speak. But you don't like whether it's the dao or the Christian God as we understand it or these things. I think there's. You should have a decision to aim at it. What's funny is you don't know what it is, but you know, when you're missing it, that's kind of funny. You don't know what the good is, but you know, when you sin, you know, when you've stepped off the path. So there is this. Yeah, I don't know there is. It's. It can be known and will not be known at the same time, but I think it's worth pursuing still, which it seems you have, you know, whether what we put in the place of that ultimate goal, you know, you're saying that, you know, that there is, you know, it's meaningful to pursue that thing still.

[Luke DeWolf]

Yeah, I think that's. I think that's a good way to describe it. And I mean, just. Just for my part, I think reevaluating the really highest level of that too often takes a lot of effort that can just be spent doing the things. And I've been. I've been just doing the things for a while and. And that's got its own. That's got its own fulfillment, right? Like just accomplishing stuff that. That has some kind of step along the way towards that upper goal. And I think I spent a little bit too long in my, say, teenage, early teenage years, 20s, early 20s, evaluating that top level goal too much and then realizing that maybe you weren't doing

[Podcast Host]

anything, you were just thinking about that, you know.

[Luke DeWolf]

Well, no, this is a good tie in actually, that, that if you're, if you're stuck, just, just listen to the wisdom of the, the stories that might sound, that might sound funny, but, but just, just go with the examples of, of these great characters. And Dr. Peterson of course tells the, the Genesis story, but he also, he also tells the Christ story quite, quite often. And what that means, what that represents. Take sacrifice onto yourself for the good of, of those around you. I mean, that's probably really blasphemous to some people, to boil it down that much.

[Podcast Host]

No, I think that's what it means to be Christ. Like you emulate the spirit of the good and that is like the way made flesh, so to speak, you know. And so you'll find it's funny that it's funny that it is this way because you wouldn't really think that it would be this way. But when you make sacrifices of yourself for the well being of others, that's where meaning is found. That's where like, you know, and there's like a psychological positive emotion, you know, that's, that's correlated with that, but that's where your life becomes meaningful. And if you want your life to be meaningless, you should think about yourself all the time and like, only do things, you know, like sacrifice other people's well being for yourself. And then if you do that, you'll be like, oh, I hate my life and nobody likes me. And you know, it's like, it's funny that it's that way, but that's, that's just how it works, it seems.

[Luke DeWolf]

Yeah. And I mean, taking that a little more concrete, it's like if you do things for other people, if they're good people, they'll give it back to you. There's a little bit of karma in there. Like what you put out into the universe is what you get back. There's so many of these ideas that echo across traditions and I mean on the sacrifice point, I think it's really important that it's not for nothing. That's really important. Like, I think there are a lot of, a lot of things these days that are, that are about extending empathy way too far in the, in the world in ways that are like, hey, I'm, I'm just going to make life worse for myself and the people around me just for that this incremental little bit of hypothetical good that it could do across the world or something like this. And I don't have to.

[Podcast Host]

I don't like twisted understanding of what. What good actually is or something like that.

[Luke DeWolf]

Yeah, yeah, yeah. And. And so I think where I've landed is that my moral compass is about making sure that the people around me are in a good place and that my local community, my country, where I live, much more importantly than where I'm from, those things are in a good shape, trending in the right direction, and then just accepting what you can and can't have control over. Right. I mean, this. This has a tie into responsibility. Right. I think one of Jordan Peterson's primary messages was just take responsibility. Only you can take responsibility for your life and make it better. Other people aren't going to do it for you, and if they do it for you, that's not actually going to have the result you're looking for. And Bitcoin is the same thing. It's. And that was probably the part that resonated with me, was that this is something where you have to take all of the responsibility, but the benefit is you get this way out of this rat race of what everyone is chasing. And Jordan Peterson is basically saying the same thing. You have a way out. You don't have to be chasing all of this consumerist stuff, the blaming other people for your problems, things like this, that's not getting you anywhere. Just take responsibility for you. And it's not that everything else sorts itself out. That's not true. But what becomes clear is what's important. And so all that other stuff just goes away, fades into the background, and you can focus on you and those around you. And that's what I like.

[Podcast Host]

Yeah, yeah, yeah. It's. It's a good distinction because I probably. I might have said something like, sorts itself out, but it might not. Right? Like, it might not work out, you know, like. But that's. And I think that's where the faith element comes of. Like, you do. You take responsibility, you do what you think is right, and then you, like, let things fall where they may. You know, you recognize that you don't have control, you know, so, yeah, you take that personal responsibility and then you act and then you go. It's an assumption of faith, but it's like telling the truth will bring forward the best iteration of reality that I can manage. And even if that ends with you nailed to a cross, so to speak, even if telling the truth, it means that's it for you, I learned that from Solzhenitsyn as well. That you should have this allegiance to the truth and that when your society, your society falls apart when everybody says they're not going to make that sacrifice. And so how that relates to bitcoin, I'm squeezing in some or some roundabout connections here, but there's this idea in the bitcoin space that bitcoin is like the most honest system ever built, that it's like this decentralized source of truth that cannot be tampered with. And I don't think that's true, but it's like really close to true. You know, like it's. Yeah, yeah, it's really close to true. And so it's one of the most true things. And so like a lot of Peterson's framework is around the catastrophic. Peterson, soj, Nitsen as well, you know, diving into the catastrophic consequences of when everyone in your society agrees to participate in the lie. You know, and I think that like fiat currency is a lie. Right. And so there's. When everybody agrees to just participate. Oh yeah, you can print value out of thin air. And, you know, there's no, there's no cost associated with that and whatever. I think that when everybody knowingly or not. Right. Most people don't understand the lie that they're participating in, a lot of people do and just go, ah, that's just the way it is. There's nothing we could ever do to change it. And I think that's like an abdication of your personal responsibility. And so just I wonder if you could connect for someone that's new to this. Like, it's like, make the case that bitcoin is this like a more honest system, that it's like sourced in something as deep as truth and not just like, oh, there's this type of money and that type of money and whatever, you can pick whatever one. And yeah, what's the connection there?

[Luke DeWolf]

This interesting thread for sure. And. Well, I think where I go with this originally is the history a little bit. This is important and it's maybe going to come off a little ironic in the current climate, but it's important. The history of the cypherpunk movement was really aiming at something specific. It was aiming at this freedom on the Internet and using the Internet to achieve freedom, sovereignty, power, privacy, these things that governments were increasingly taking away from their citizens. And I mean, the great financial crisis, of course, was a catalyst here, right. To push bitcoin over the edge to getting created. And so, I mean, the, the purpose of bitcoin has always been to solve the money problem. But it's gotta be understood from the lens of the cypherpunk history like it was released on this cryptography mailing list, right? I've got a button that I think Samson Mo created his cypherpunk store. I've got a bitcoin button that my 2 year old likes to press. And one of the quotes on there, there's a bunch of people, there's Samson, there's Knuts von Olm saying everything there is divided by 21 million or something like that. And then there's Adam back saying cypherpunks write code, right? And the whole thing there is that you can take, you can make something concrete that is only in this ephemeral digital space. Like literally the ones and zeros. You can write a program that runs on a computer that changes something in the world and you can do that in a way that has previously been walled off somehow. Like the physical barriers have just been too great. When, when you had to physically write something down on a piece of paper and transmit that traditionally. Right. Gold. Gold can't move, right? But, but the, the invention of, of electricity, the invention of, of being able to transmit over telephones, this sort of thing that then this is Lynald in a little bit or at least she. This, this take. But, but that, that communication started to outpace money, right? Money money was going slower than communication at this point. And so fiat was able to, to run off those communication rails, right? But gold hard money wasn't able to do that. It was physically constrained by its properties. And then you get the cypherpunks who are there and taking advantage of the communication mechanism and creating something that is native to the communication mechanism. And there's almost something to the immaculate conception of bitcoin or the immaculate seeding of bitcoin. Just to talk about the fairness of it, that it was never distributed in any way other than here it is. Join in if you want to. Right? And there's, there's waves of adoption to bitcoin. There's, there's a lot of people who got into bitcoin because they were wanting to buy drugs on the Silk road, right? Or at least, or at least that was one of the things you could do. And then it brought a lot of people in, you know, and, but there was never any selling it to investors.

[Podcast Host]

I feel like that helped balance out the. You have your hyper technical nerd, whatever that was, that initial group, cypherpunk, hyper technical nerd. And then the second group was a bunch of weirdo people Interested in drugs and they kind of helped balance the ecosystem early because you had that significant personality divide and that. But I don't know. I feel like there was. Looking back on the development of bitcoin over the time, I feel like there was utility to that polarized set of people coming into it.

[Luke DeWolf]

Yeah, it's an interesting one. I think the whole point with it was that something was intentionally put out into the world to solve the specific problem of electronic cash. Just to, just to cite the white paper. But, but really the, the. The funny thing is that, that there have been some critiques of, for example, Andreas Antonopoulos and I think others who have sort of followed in that lineage that the, the monetary angle of Bitcoin is, is sort of not correct or at least the monetary angle of Bitcoin is reading into something that, that isn't there. Bitcoin, the, the, the train of thought that I'm, I'm citing a little bit here says bitcoin is a technology. Bitcoin is a technology. It's a decentralized system and it happens to be quite good at something that resembles money. But I did. I just go, I go back to the, the white paper and electronic cash. Right. And no central controller. It puts everything back to the individual. That's, that's kind of the tie here, right. Is that. Is that Peterson puts the individual above all else and says that, that he asserts that those cultures that put the individual foremost are the ones that survive, that do the best. That.

[Podcast Host]

That the collective thrives even through the prioritization of like judging people at the individual level maybe is the right way to put it. And that sounds mostly right to me, I think. Yeah, it seems to me to be that way that when you, when you optimize for treating people as if they're divine sovereign individuals and that they're in control of their behavior and they will be judged, they'll receive the consequences of them positively or negatively. That that frame results in the most flourishing of the collective. Yet it seems there still needs to be a place for consideration of the collective as well. So. But, but if I'm going to lean in direction, you know, like, I'll lean in that direction pretty hard. Yeah.

[Luke DeWolf]

Yeah. Well, yeah, I mean, I for sure don't go all the way to being like a pure ancap. Like that the world is that an ideal state of the world is that there is no one at all who has any kind of control. If you read Peterson and you look at kind of the cultural lens, hierarchy is important and order is important and having order in a society is important. It's just that the levers of control are wrong. You get a tyranny effectively. There's, there's a term for a lot of the state of the world is that it's an archo tyranny that, that governments won't deliberately, if you're conspiratorially minded, they, they won't police a lot of low level crime. You see this in, I mean you probably see this more directly but like, like California blue states basically and in Europe it's, it's these countries that, that are a little more liberal, they won't police lower level crime, especially when it's, when it's done by, by immigrants or those of immigrant background.

[Podcast Host]

And this morning we saw like thousands of people running up on the beach in Spain. Yeah, yeah, yeah. Just, I mean not that this is the first time that this has been happening. Right. But there's just this, we say that there are rules then if you break them it's like well, we're not really going to enforce them. It's like the laws don't even exist then, you know.

[Luke DeWolf]

Yeah, exactly. But they still have this monopoly on violence and they're still theoretically in control. It's just creating a system where people are dependent and have to conform or get ostracized by the, the powers that be sort of thing. And yeah, I mean I'm a fan of some conspiracies here and there but at the end of the day the result is just very much that societies that are going away from this individual primacy are running into many of these issues and they're running into issues of basically chasing the fiat gain of getting more people into your country to increase GDP to keep number go up as in the gd that GDP number or the number on your stock exchange or the number in your real estate portfolio. Right, those. Yeah. It's just paper and it's just chasing a bad reality. Well, recognizing these things and to put it back to Bitcoin there. So Bitcoin put the hands in node runners originally like the people who are running the network are enforcing the rules and everyone operates as an individual, makes their own choices. You can join the network or not, you can choose one set of rules or not. And that really puts the primacy back towards the individual. And, and I mean one, one thing that I say not to, not to you know, start the, the plugging or anything but, but the one thing I say in my book like pretty consistently is there's always something One person can do, like, you can always do something to strengthen your security, to strengthen the network's security. It's. Of course, of course, this is a massive network and the actions of one individual might not be felt. But the thing is, if no one is doing these things to make us all more secure, then the whole network will suffer in the long term. Trend. Right. So you can do your part to keep things robust and working. And so that's the point, is that the individual has to take the responsibility here. And that's the big shift where you're not dependent on some bank or payment process or a government or whatever. There's no backstop. You lose your Bitcoin. That's it. But at the same time, yeah, there's a lot you can do with those 12 magic words, and there's a lot of sovereignty to be taken for those who will.

[Podcast Host]

I want to get in your book right after this, but what do you think of the 12 verse 24 words? Do you think there's any significant difference really between the security of using 12 or 24 words? I've always thought 24. And then somebody was telling me recently, like, it's kind of waste your time.

[Luke DeWolf]

Yeah, yeah. Yes and no. Technically, 24 gives you more entropy. This is, this is what the 12 words are doing is, is it's increasing the amount of randomness that goes into creating your, your, your private, your, your private key or, or more specifically the, the master generator for all your private keys is, is really what you. What's happening these days. You can use the 12 words for kind of anything, but it's, it's creating the seed that, that creates all this other cryptography. So you do 24 words, you're just flipping that coin twice as many times. Basically. Like, if you, if you think of, if you think of the way you, you find your, your private keys, you just flip a coin X number of times, and it's 128 for. For 12 and it's 256 for. For 24. And yeah, that.

[Podcast Host]

Yeah.

[Luke DeWolf]

Sorry if I got that slightly wrong. Yeah. But anyway, it's, it's double.

[Podcast Host]

I think that's four. Yeah, yeah, yeah.

[Luke DeWolf]

And it sounds like a lot. Right. But the thing is that, that 128 is already. Is already astronomically random. If you're, if you're actually being random, you have to be actually random. And that's a cryptographic challenge that we've mostly solved. But you do have to be.

[Podcast Host]

Would it take like twice as powerful of a quantum computer to break that. Is that the idea, that's where like

[Luke DeWolf]

effectively is that 24 words should to an extent be a little harder to crack.

[Podcast Host]

But we're talking about quarters of magnets, like so far out the size of the numbers that it seems negligible.

[Luke DeWolf]

Yeah. Because the thing about it is that entropy is just the thing that's seeding the cryptography. The algorithm isn't different. Right. So the point is you're still sticking a needle into the same haystack. It's just more about like, it's maybe the size of the needle. That's, that's kind of a bad analogy. But yeah, it's, it's, it's, it's effectively that, that if you, if you use the 24 versus the 12, yes, you are being more random in what you're, you're generating, but that it passed the point of significance a long time ago. And it's actually, it's actually true that you can have less than 12 words and have that be relatively secure. It, I, I, I had, should couch this properly. But, but you, you can write down, I think it's, you can even do eight of your words and like put them in your pocket or whatever and go on a flight or even email that to yourself, something like this. And remember 4. And the time it would take for someone to crack the four is, is still like astronomically hard if they were, if they were just trying every combination. Right. I think it's still possible, but it's like you have to get yourself over the threshold of basically a standard computer being able to brute compute if they've already got the first eight or I think once you get to only three missing, I think that's the threshold for where it's not so hard to figure out the rest.

[Podcast Host]

Yeah. Let's transition then to your book. I wonder. Two questions at the same time. Why'd you write it? If you were to give like what the purpose is for it and then two is, what are the top like two or three things that your average pleb would take away from your book, the most valuable things that they could take away from your book when they read it.

[Luke DeWolf]

Great questions. Well, so the first one, semi meta answers. I wrote this book because I had it in me, but it was, it was more like I, like, I realized I always, I always knew, okay, but maybe I could do something cyber security related here. Like, like this is what I do for my, for my day job and everything. But, but I've never really been the kind of person out there putting out say, okay, here's, here's how to secure your hardware wallet or whatever it is. There's lots of people doing great work on that and it's valuable, it's great stuff. But then what I realized was it was this critical infrastructure angle that I didn't see anyone talking about. And I really got a little bit inspired by some of the topics around spam, arbitrary data, things like this. And I saw some parallels to how, how we would, we would treat something like that in the critical infrastructure world. And I just, I got to thinking, hey, maybe I can, I can put together a book that's, it's not comprehensive, I don't want to use that word, but that, that really goes through the threat landscape of bitcoin. And I came up with about 10 categories of things, so there's 10 chapters. There's more stuff going on there in bitcoin, but keep it simple and contained enough and mapped out, what are these threats to bitcoin? Whether that's your personal Bitcoin or to the network. And I also grouped that into three categories, so kind of your own individual bitcoin, then more like structural threats to bitcoin, the network. And then finally things that are kind of coming at it from external, like political threats, regulatory threats, what happens if the electrical grid goes down, quantum AI, all that sort of thing. So I went through that whole threat landscape and modeled that out. Threat modeling is the term in the industry for that.

[Podcast Host]

What percentage probability, having run that analysis, what percentage probability would you put on bitcoin surviving the next hundred years and retaining its important fundamental properties?

[Sponsor Announcer]

Wow.

[Luke DeWolf]

First of all, I'll say that there's a difference between quantitative analysis and qualitative analysis. So everything in defending bitcoin is broken down in terms of risk, which is the measurement of the likelihood of something bad happening times the impact of something bad happening. And the thing is, I'm doing it subjectively the entire time. I'm clear that my ratings for some level of risk likelihood impact is subjective. It's my opinion. It's an educated opinion to some extent, but I'm not an expert on every in and out in the bitcoin space. And so I just want to couch that a little bit. It's my best understanding.

[Podcast Host]

And anyone who tells you they are, by the way, don't believe them. Because there's nobody that's an expert on every piece of it.

[Luke DeWolf]

Yeah, no, no, absolutely not. Even to satoshi to a certain extent. Actually, not to sidetrack us too much, but I think there is A difference between people who know how Bitcoin works and understanding how it behaves out in the world, that could be important in other parts of the discussion.

[Podcast Host]

It is a network. It's a network of humans. Right. So there's the technical. This is what the code says, this is what it does. Yeah. This is how it works on that. And then there's the element of it survives and grows because of humans coming on and off the network.

[Luke DeWolf]

Absolutely. And I think that there is a difference in perspective there. I have massive respect for developers who know what they're doing with Bitcoin and know how the code works, but I definitely think there's a disconnect between plebs and devs in terms of the way they're thinking about this stuff. But anyway, so quantifying it is really impossible. The thing is, I think as long as we're trending towards more decentralization, if I'm going to break it down a little bit, that in Bitcoin terms, decentralization equals security. The mining threat, for example, the biggest issue with mining is just that, that is getting more and more centralized all the time into a few different pools. Right. Foundry controls over 30% of the network on their own. You can take the next two others and you've got 50, 60% of the network. Right. So if they were to work together, they could choose to censor blocks, they could choose to reorg any chain so that only the three of them get to find any blocks. Like there's some serious stuff, stuff that can, that can happen if one entity is controlling 51% of the hash. And like, we really need to make sure that that doesn't happen. And so efforts to decentralize mining are just fantastic. And I mean you can have opinions about people who work at Ocean, but Ocean is seriously doing some fantastic things. There's some criticisms of Ocean that they're not perfectly open source or whatever it is, but, but I mean they found over a thousand blocks from a miner making their own template and that's just really improving the decentralization of the network. And so I kind of look at all this stuff through are we trending in the right direction and are we taking the right steps to keep Bitcoin working? Because that's really what cyber security is all about, is keeping the system running. Critical infrastructure. Cybersecurity is all about keeping the system running. There's a, there's a term in, in the industry, the CIA triad, no relation to the three letter agency, but it stands for confidentiality, integrity, availability, Confidentiality is keeping secrets safe. Things like passwords, things like your Social Security number, things like the, the credentials for your bank account, something like this. Integrity is preventing tampering. So if someone goes into your bank account and steals everything they've tampered with it, if someone takes your telegram account and locks you out and starts trying to scam people and infect you with viruses, that's an integrity breach. But availability is all about the system, keeping the system running, keeping one more block every 10 minutes, TikTok next block, keeping that thing running. That's the entire point. And so I guess to actually answer the first part of the question or the second part of the first question is that the takeaway that I want the readers to understand is that the network depends on individuals in every aspect and that there's always something you can do to play a part in it. And it goes beyond your individual bitcoin. Securing your individual bitcoin is really important and I lead with that. But understanding and knowing about the other things going on and getting involved and putting your weight behind things that decentralize the network and things that keep it focused on the monetary properties, that's the goal. And maybe in terms of the next hundred years question. Well, I think the only way bitcoin actually dies is if people stop caring about the core purpose of bitcoin, the thing that it's here to do. If bitcoin loses its identity, I think bitcoin loses the value proposition, to be honest, I think a number go up, stops if, if bitcoin loses its identity as a monetary system, as money. The more it's co opted and centralized, the greater the risk is. I'll just put it in terms of risk. The greater the risk is that this project fails and something catastrophic happens. That either people stop caring or something actually takes bitcoin the system down and there's nothing anyone can do about it. Well, some people, and I'm fairly persuaded by this argument, think that it's not really possible to do bitcoin again now that there's knowledge of how that whole thing would go, would play out.

[Podcast Host]

There's always one shot at this like natural emergence where nobody, you know, where no one knows who created it still. Which is just staggering that that's the case. Right?

[Luke DeWolf]

Yep, absolutely.

[Podcast Host]

Yeah, yeah.

[Luke DeWolf]

So protecting that's a big deal. And I think the takeaway, the primary takeaway I want is one of empowerment. There's always something you can do, but stay vigilant, stay aware. Don't just think that bitcoin Is antifragile? Because some people on X say it is. Right?

[Podcast Host]

Yeah. So then I wonder if you could explain to me now as if I was brand new to this conversation, let's say how Bitcoin's governance model works. What do the nodes do? What do the miners do? And most importantly, related to this, I suppose, what check imbalances do nodes have on miners? Do users have on. On miners? I guess the four groups that come to mind immediately are nodes, miners, devs and users. Perhaps maybe you'd have another way of breaking it down. But yeah, how does this governance mechanism work and who's in charge?

[Luke DeWolf]

Nope, you took this right out of probably chapter 12, I'm guessing is where I put that exact model in there.

[Podcast Host]

You use those four. Did I hit it?

[Luke DeWolf]

I use those four.

[Podcast Host]

Okay, nice. I just started the book, I haven't

[Luke DeWolf]

finished it, but the Spicy chapters are 11 and 12, so I hope you enjoy those. The governance model. Yeah. So nodes, miners, developers and users. There have been other models for this that, for example, put exchanges as their own category. But. And yeah, I break it down here because I think every participant in the network is one of those things at least. Right. Hopefully everyone is a user, a hodler. Hopefully. But that's not always fully guaranteed. Right. Because you have miners that just sell all their Bitcoin. They're participating in just the mining service. I think most node runners are hodlers. They don't know why you wouldn't be otherwise. But oh yeah, merchants. Merchants and exchanges. Merchants and exchanges is kind of the other kind of categories that come out here. And a merchant can be in the same stage like they accept Bitcoin because some of their customers want them to accept Bitcoin, but they never do anything with it. Right. So there's degrees of are you a bitcoiner or not? Something like this. But okay, governance structure. The. The nodes enforce the rules. So this being really basic is that the nodes agree on a set of consensus rules and they say that the next block that comes in is compliant with those rules or not. That's really simply what nodes do. And there are a lot of other things to it. Like every transaction in a block must be consensus valid in order for that block to be valid. So nodes do a lot of filter semi ironically, but. But in order for, for a transaction to propagate through the network, it must be consensus valid. Something like this. Consensus and policy are two funny words here that are relatively relevant, but they're both overloaded, which is bad. Multiple uses. I'll try to keep the term consensus as referring to those rules that make a transaction or a block valid on Bitcoin. What all nodes agree to and policy are certain settings that you can change on a node, for example, for what transactions you, you choose to relay on the network. Miners are specifically attempting to find a hash below the current difficulty target of a candidate block. So they have a block template, a block of valid transactions, or else the work that they're doing would be meaningless and they're hashing against that through various means and trying to find valid hash. And the sum total of the work that the miners are doing is the security of the network. It's what prevents double spending. It's what prevents, it's what prevents everyone from building a block and kind of claiming reward. It's the mechanism that keeps everyone honest, something like that in a chain. So the miner is looking for that next block and the nodes validated. Now we're talking about a change to the rules. Both sides have to be on board. And there's been, and I'm not glossing over the other two groups yet, it's just that there's this interplay here that nodes can change the rules that are valid. But if all the miners leave and decide to stay on the old rule set, something like this, then really what you've got is that there's a competing set of chains. Some nodes will be running one set of rules, another set of nodes will be running another set of rules. Now, mining activity does not equal economic value. It does not equal which chain in a split is the so called right one or the canonical one, the one that is Bitcoin. But miners won't, if they're rational actors to any degree, they won't stay on the chain that gives them less value. So there's a correlation there. Developers are the people who can build changes to the system. And that's I think the key difference here. So if you think about it kind of like two sides and you kind of have miners on one side, nodes on the other. So the devs are kind of somewhere here at the top and the users are somewhere in the bottom and the kind of my little square of conceptualizing. And the devs are able to,

[Sponsor Announcer]

they

[Luke DeWolf]

make changes, they propose changes, propose the

[Podcast Host]

changes that the miners and nodes would decide whether or not to accept, right?

[Luke DeWolf]

And specifically what they're doing is they're changing node software. That's very specifically the only thing that matters here is the node software. There are other developments that can say, create things that use Bitcoin. In interesting ways, ways that some people might object to. But the cool thing about a permissionless system is that you can just do what you want on the Bitcoin network, even if people don't like it. And I say cool semi ironically. It's a constraint that is a emergent property from Bitcoin's lack of a central controller. And I, I say basically that sentence verbatim somewhere in defending Bitcoin, I forget exactly where, but I was questioned by a reviewer of the book about that one sentence where I said something like, permissionlessness is the side effect of Bitcoin not having a central controller. But that's an important subtle point. The permissionlessness of Bitcoin, the censorship resistance of Bitcoin, it's important that it's emergent, right? The system was built to create this form of electronic cash, and the only way it could do that without having a central controller was building it in a way where you don't have to ask permission for a third party, right? Where censorship is impossible because you just have miners building transactions into blocks, things like this. So it's subtle, but the reason I consider that important is that it's kind of this thing that emerged out of the design as a consequence, a necessary consequence. I'm not saying it's good or bad. Like, I'm not, I'm not saying that permissionlessness is bad, but I'm saying that the property of permissionlessness is an effect of everything else, of how the network was built, this decentralized group of nodes and the mining and all this. One of the side effects is that you can just do what you choose within the rules. The other effect to that though, is that any other actor on the network can choose to do things as well, consensus valid things, such as a node runner can choose not to relay certain transactions. And I'm adamant that that's not censorship in any way. If you're making a determination not to send a transaction onward, you, the individual, the node runner, you're making an individual choice and no one can force you to do that, right? I think that's fantastic. Now, similarly, you can also choose to run a node Libre relay as an example, that just says anything goes. And even they have limits. Actually they don't relay transactions that are below the dust limit, for example. And then that's a particularly set. That's a particularly bad idea for miners and nodes to relabel of the dust limit for a few reasons, but not super relevant. But yeah, the other thing is that miners can choose which transactions they include in the blocks that they are searching for, right. And if they choose to give up some fee revenue, but they don't. And they don't include certain types of transactions or even certain addresses, right? Like if, if I'm a miner and I don't like your transactions and I know your addresses, for example, like I can, I can. But the beauty of it is.

[Podcast Host]

But they'd have to stop every miner everywhere from including, you know. Yeah, that's really decentralization, right? Like, because you could rent hash and be like, you know, say there was 99% of. Of miners were like, we want to censor this one guy's transactions, but if you could get 1% of hash somewhere, you know, which is like not a small thing to do, right. But a country or whoever could do that, then eventually you'd get your transactions processed in a way that the other 99% of miners wouldn't be able to stop. So that's what, that's how Bitcoin manages to provide that, that uncensorability.

[Luke DeWolf]

Yeah, absolutely. And, well, it's actually like, it's more of a lens on that individual choices on consensus, valid things. It's permissionlessness in multiple directions, right? You have permission to interact with the network in all of the ways that you want to. So if you, if you choose to say that a certain type of transaction is abuse in your view, and you just simply refuse to interact with those things and when they land on the chain in a block, nothing you can do about it. And that's fine. I don't know anyone who's anti spam who doesn't acknowledge that reality. This stuff lands on chain. Okay, fine, but we can do things like put some friction up or miners can, can choose not to, not to include those, those transactions or a group of nodes can, can choose to, can choose to get together a coordinated manner, but decentralized and say, hey, we're going to run a different version of the code, still fully valid, fully compliant with consensus up to X point, but we're going to start enforcing different rules soon. So that's the funny thing with Bitpoint 10, is that it's just this permissionlessness playing out in a different direction than a lot of the people who say permissionlessness is so important might permissionlessness, but not like that. Yeah. So the funny thing is the dynamic developers propose changes, right? But it is up to nodes, node runners and miners to accept those changes or not. And the way users, that fourth group kind of comes into play here, and this is maybe going to be controversial to Some, but it's. You vote with your wallet, right? I do think it's true that choosing to buy Bitcoin or not is a signal in the confidence of the network. And choosing to buy node hardware and signal one way or another, that's also a signal. Choosing to get into mining, that's a signal. Choosing to do development or fund people who do development, it's all, it's all a signal. And economic weight is a term that's, that's a little. Not super popular in say, Pro110 circles. But I, I can't get around that, that if you are representing a lot of traffic on the network, if you are representing a lot of, a lot of wealth stored in Bitcoin, that you probably have more effect on the network than. First of all, you definitely have more effect on the network than a node that just spins up and watches what's going on. If that node isn't doing anything, running a transaction through it, or even if it's just the thing you connect your wallet to and then you got your cold storage and you put some more in cold storage. I mean, that clears the bar of being an economic actor in Bitcoin. But yeah, there is some, there is some say there is something too that a large merchant or a large exchange or something like this likely has more of an impact on the network in terms of what software they choose to run, what mining they choose to run. And yeah,

[Podcast Host]

they sort of are a representation of all of the, not all of it, but like a lot of the users on the network, it kind of goes through this funnel point and they're represented there. And I noticed the bip110 guys don't. Yeah, don't like you were saying, they don't like the putting weight on, on that. But it's like, okay. So I view it more as like levels of okay. You have the, the devs propose the code and then you have like the war that takes place on the nodes to be like, okay, who's going to run what, who's going to accept what we see our node signaling, but it's imperfect. There's a rough consensus that forms there because there's different ways that can be. Can look like one thing is happening or another thing is happening, right? And then, and then ultimately you'll, you'll, you have that fight there. And then there's the final like, okay, where does everybody go right when you have the bcash Bitcoin split, it's like, okay, you have, you, we have that debate. Everyone decides what sort of software they're going to run. It happens and then it's boom. Where does consensus form and consensus forms. Yeah, at the economic level.

[Sponsor Announcer]

Right.

[Podcast Host]

What makes Bitcoin valuable is all of the people who have decided to store their value on the network. And so that ultimately is like, that's where the consensus is, is where does everybody move. And that's not Bitcoin specific. It's the same thing for the United States dollar network. It's the same thing for the euro dollar or the euro network. These are all just monetary networks that have their users on them and they're valuable because all of their users decide to place their value there. So I think that it's. Yeah, there's like this sequence of events and we'll see if we have a chain split with. I don't know, actually, I don't want to go all the way there yet. So keep going with what you're saying.

[Luke DeWolf]

No, well, yeah, this concept of sort of economic weight, economic actors, this is another thing that comes down to individual choices. Right. Like if you, the individual choose to go through a centralized third party, you are giving more power to that third party on the network. You're giving up your sovereignty, you're giving up your voice, your vote. I don't believe in one node, one vote, but some amount of nodes is putting some degree of threat into the network. That's what bip110 is. And I understand concerns about that. Is this the right way to do a change on Bitcoin? I'm fully sympathetic to that particular viewpoint especially it convinced me for a while that pretty much okay, no matter how worthwhile 110 is, even if all of

[Podcast Host]

the seven things were net positive by the means at which it's installed, could you take issue with that? Yeah. So why did you take issue and then why did you change?

[Luke DeWolf]

Sure. So combo factors, the governance issue, largely. It's not that I didn't put full weight to full seriousness on that, but definitely I've always thought something like, if it's possible to cause a change on Bitcoin, then that's following the rules for sure. And, and maybe that's, that's kind of an underlying point here, is that no one's doing anything wrong. They're just, they're running different code. Right. Like, yeah, it's. It's entirely possible that bip110. Bip110 ends up being. It ends up failing, ends up splitting off whatever it is. But it's also entirely possible that they'll convince miners to, to signal and off it goes. This is the, what the user activated software concept is, it's that users are going to change their rules and tell miners you can either follow or, or not. And, and so what was convincing me a little bit was that, okay, I'm writing this book about risk management effectively on Bitcoin and first of all there was this massive governance issue, right, this huge issue with the development of Bitcoin Bitcoin core. I highly recommend the article series by Hodlonot on this. He's got some detractors, some criticism for this series, that it's biased, one sided, whatever. I, I really think he's, he's just putting out statements of fact that are easily corroborated. And so there is a pattern of, of that, that Bitcoin core development is effectively a walled garden. And, and it's pushing Bitcoin in certain directions that plebs might not agree with. Right. But the corollary and what I ended that same chapter with about this kind of governance issues is that what happens when you stop agreeing, right, these chain split scenarios, and this is for people

[Podcast Host]

that are new to this. It's like some of our audience is newer to this conversation. I think it's important to understand that we've had fork wars before. We're having a fork war now. We will have more for cores in the future. This was like. And they will probably be more contentious than this one in the future, I bet. You know, and so, and so like this is part of Bitcoin's decentralized self correcting mechanism. Yeah.

[Luke DeWolf]

Yeah. Well also the meta, the meta thing here is that because I didn't want defending Bitcoin this book to be about the current moment, I do cover bit 110 specifically, but it's just, it was impossible not to. A chain split, right, is just the mechanism for, for disagreement. And if you can't take what another group is saying for, for their rule set, you know, that's your option. Change the rules, follow a different set of rules. Whatever it is, it's, it's really part of the design if not, not necessarily intentional, but it's, it's an effect of what blockchain actually is. And so if a group is just simply changing the code they're running and if it gets to the threshold of that, it's going to convince the miners to, to signal and become compliant with the new rules or implement the rules. That was entirely within the frames and bounds of the rules of Bitcoin. So I see nothing Wrong with that now. Okay. Do I see some issues with that? Yeah. Okay. Any minority could come in and sort of push this through. Yeah, there's some concern there. I don't want to hand wave that away, but there is a resistance mechanism that has not been invoked against BIP 110 and that would be specifically rejecting blocks that comply with 110 through the signaling mechanism.

[Podcast Host]

Why do you think that hasn't appeared? The user rejected soft fork.

[Luke DeWolf]

If I'm being as generous as steel, manning their position as much as I can, I think they just don't take 110 seriously. That's my position on that. Because I think if they did and they care enough, as some rhetoric online seems to be saying, they would just run it. There was a. There was a post by Stefan Lavera incidentally, so. So I give him credit for this, that some interactions with Stefan were what sparked my understanding that I'm thinking about this through this critical infrastructure lens, through this lens of availability. I consider the arbitrary data stuff to be a. Basically an availability attack on Bitcoin, on monetary use of the network. And so interactions with him is what sparked it. And so I give him credit in the, in the acknowledgments, but he had a post a couple of days ago. I hadn't responded to it there, but why not to run a ursf or why URSF user rejected soft fork isn't required. And the list goes something like. We've never had to do it before to defeat other forks. It would. It would require a lot of coordination to do it. And yeah, it would. If there's a coordinated group that's trying to change Bitcoin, you kind of need a coordinated group to defend that. If you're on the side of.

[Podcast Host]

I don't like how that feels kind of, you know, like it's a low resolution take, but I don't like the idea of like, you know, and maybe it's just reality, right? Maybe it's just. Who cares? It's just the reality of the situation. But it seems to me like, like, I don't know, I don't like the idea of having to constantly defend against minority convinced minority positions, I suppose.

[Luke DeWolf]

Well, here's two, here's two points here, right? One is that we don't know a bip110 has achieved the threshold. And maybe to try to actually answer one of your previous questions of kind of what got me back, because I think this is important. I write about this chain split stuff and I'm writing a risk management book. I can't advocate for the scenario that's going to cause more uncertainty. Chaos. Right. That's the riskier scenario. Avoiding a chain split is the thing that reduces risk the most on the network. But what changed my mind was that after a certain point this thing is going whether we like it or not. Right. And I support vast majority of bitpoint and I certainly support its goals. I think the implementation isn't perfect. I think the activation method isn't perfect. I have been clear about those things online. I don't think litigating that is the point here.

[Podcast Host]

I think I sit right about there with you as well. Yeah. Like what it aims at seems totally right to me. But I just wonder if it, if it will be net positive or negative

[Luke DeWolf]

as a result of.

[Podcast Host]

Yeah, those other pieces.

[Luke DeWolf]

I'm, I'm certainly, I'm convinced it's net positive, but I think it could have broken a couple of fewer eggs to do so something, something like that or it could have made some compromises to make it a little more socially, socially acceptable. And this is actually a really interesting thing getting back to a little bit earlier in the conversation about speaking your truth and speaking with integrity and, and just drawing a. A line. Yeah, there's. There's really something. There's really something to that. That. There's also something to pragmatism though and, and achieving what you can not making. Not taking a stand for the perfect that ends in you dying. Basically. It's. It. There's really some, some even philosophical wrestling going on there. I, I consider myself pretty pragmatic person and that the, the outcome is. Is important and, and getting to net positive is better than getting to perfect something like that. So I'm quite convinced that BIP 110 is net positive. I do think so. But it could have been more compromising to, to achieve social consensus more easily such as by having the opportunity limit be slightly higher. Not the 83 bytes but 256 or something like this. But anyway, anyway, some people probably aren't going to like that. But it's fine. The, the whole thing there is that this is happening. Right. And what's the scenario that's going to have the most uncertainty and risk now that bip110 is definitely going to activate and there's definitely a significant portion of the network that is going to enforce it. And to anyone who says that this is just a Sybil attack, I've been out to conferences, I've been speaking to people online in real life who believe in this thing 100%. You should see the YouTube comments for, for Knut Swano's podcast, you know, my mentions on X, whatever. Like, okay, if this is, if this is all just some Truman show, like winding us all up here, this is just a civil attack. It's a damn good one. Because honestly, like, real people care about this stuff. Real people are choosing to do this. It's not a civil attack, definitely.

[Podcast Host]

And I've seen a lot of those real people that I know and real people that I know through the Internet. And yeah, it's not a civil attack, but I would guess that it's probably

[Luke DeWolf]

about

[Podcast Host]

the amount of nodes that are running it in proportion to people paying attention. Maybe slightly higher. Right. Let's say that 18, 20% of nodes are running knots. Most of those are signaling for BIP 110. I was running knots and I was running knots signaling for bip 110 or however you phrase it correctly. And I started digging in, I was like, I think I want to keep running knots, but maybe take off my signal for bip110. And I know that that is optionality. They include on that side, which I think is good.

[Luke DeWolf]

Not anymore though. You have to downgrade.

[Podcast Host]

You'd have to go back.

[Luke DeWolf]

Okay, yeah, yeah, but, but, but yeah, it's funny. It is what it is. I mean, I mean I do, I do agree with you about the proportionality. And I mean this is another funny aspect to this, that, that coming back to the ursf. But. Okay, I'll try and answer. We're in like nests of questions at this point. So what's the least risky scenario? If, if it's, if it's happening and, and I, I reason through that a little bit. And we're not going to convince people to not go through it with it. It's just not going to happen. And so the smooth activation of one tent just the thing goes smoothly. Miners choose to signal, they choose to comply. It all happens in a quick instant. And there's no chain split issues. There's no long period of time where you don't know which chain your transaction is going to land in or not. That's the least risky, least chaotic scenario in my view. And all of the bad scenarios where you have lots of risk, you have risk of losing money, you have risk of. Well, you have risk of there being a hard fork off. And a certain proportion of the network chooses to not be here. Which means that a certain proportion of the people who are. Who were it. Yeah, exactly.

[Podcast Host]

Especially the people that we lose. Even if they're wrong, let's say if that's not the right frame, but let's say even they're wrong and even if BIP 110 is a net negative, the fact that we would lose these really principled monetary maximalists, I think it's the right type of people we want on the bitcoin network. If we were to. To lose that crew, I'd be sad. You know, I don't want to see a chain split where, yeah, you know, we lose some of that. Some of that group, which I find unlikely. I find that very unlikely. But.

[Luke DeWolf]

Well, you. I don't know. I think some people are ready to fork off. Absolutely. And I mean, like, I had. I had a back and forth with Luke Dasher before I. Before I kind of like really flipped here. But I mean, I was questioning this stuff right up until that last second. And like, what is the implication for Bitcoin if we're really putting the decision into the hands of just these few groups of miners? Basically. But I came around to the game theory, and I mean, that's a loaded and sort of annoying word, but the game theory of it here is that or the risk management, if I can frame it a little better. You have on one side a scenario where if you don't signal, you have a chance, however small, of losing the blocks that you find, losing the bitcoin that you've found. And on the other, you eliminate that risk. Basically, to the extent that it's possible to eliminate a risk, you eliminate that risk, you just signal. And by making that choice, okay, maybe, maybe the result is slightly lower fees. Maybe it's actually entirely possible that fees would go up if arbitrary data stays at the same level. And that's a funny other aspect to this conversation, because it's slightly more expensive because they have to chunk it up differently. No one says that BIP110 is about stopping arbitrary data. It's about adding friction and about adding sensible limits, making it harder, sort of.

[Podcast Host]

There's the social element where it signals this stuff is not welcome here, and then there's the technical element where it makes it just a tiny bit, but a little bit more expensive to get.

[Luke DeWolf]

Yeah, yeah. And I think. I think the meta thing that gets. That gets glossed over here is that. Is that I think the limits are actually legitimately good. That development in the direction of let's. Let's make bitcoin more easy to script and more easy to do cool and interesting things with exciting, smart contracts, things like this, that's a paraphrase of something Merch said recently at I think a bitcoin or something like this. That's the type of thing that opens us up to attack Surface in the future. The unintended consequences. We didn't really get into what set this all off. But, but basically a couple of design decisions in Taproot allowed this whole arbitrary data thing and well, okay, again, jumping

[Podcast Host]

around you similar in its installation. Right. In terms of. There was a minority of nodes who thought this was a good idea. This is where I wonder. Because it didn't really have consensus. Oh, okay.

[Luke DeWolf]

No, Taproot is the one that had overwhelming consensus. Overwhelming. And there was sort of a little bit of the goodwill that Core had built up over for Wars Segwit. All this standing, standing in a principled way against the B cachers, you know, and, and some of that goodwill went into that. Taproot got activated fairly quickly and a lot of people who, a lot of people didn't see the, the issues that that could arise. And, and, and that's entirely increased functionality

[Podcast Host]

and increased threat vectors for unintended consequences.

[Luke DeWolf]

Yeah. Over 99% of taproot is spam and dust at the moment. And again, being outcomes based, it was Taproot and net positive. I do not believe so at the moment. Right. One of the things with bip110. Okay. And I keep sort of not answering this question, so it's the least risky option. But it's also that bit 110 shows that we node runners, plebs users would be able to roll back a change to Bitcoin if there was some negative, some unintended consequence. And Saylor was talking about this ages ago, that changing Bitcoin is actually hard because you're always basically guaranteed to make one party not happy or that one party can be not happy. And that's just not an ideal situation. Like a bunch of miners weren't happy back in 2017 and I mean they ended up basically coming around. The lessons of 2017 are kind of funny here and really play a big part in what's going to go down here as well was the lesson of 2017 that the nodes are in charge and the nodes can just do stuff. Nodes can impose rules. I don't know. Right. What I said at the beginning there, when we asked about, when you asked about the kind of the power structures. Nodes enforce rules that I believe is proven right. Miners tried to change something. Miners tried to change the rules and nodes didn't let them do that. If bip110 fails. I'm stealing my steel, manning this side here. What that will tell us is that nodes cannot create new rules and just force that through without the social layer of building consensus.

[Podcast Host]

Is that. Yeah, right, right, right. I. Cause I wonder if that is what it tells us if. Because maybe you can make the case that nodes could change rules, they just didn't get enough social consensus, total consensus to do it in. In this case.

[Luke DeWolf]

Yeah, yeah, basically. Yeah. But. But I. I think the thing is that. That if everyone agrees and it goes. Goes smooth, then you had consensus. Right. If it's not controversial, you didn't.

[Podcast Host]

Well, there's the consensus. Yeah. When.

[Luke DeWolf]

When it's something like that.

[Podcast Host]

When it becomes the longest chain. Yeah, yeah, yeah.

[Luke DeWolf]

Well, and, and then, and then. So that's, that's the, that's the thing here. We're finding out. We're finding out if BIP 110 has made enough of a threat here. And again, it's tough. Coming out and supporting this directly was not an easy decision. Even though I support its goals. I think I was saying that. I get the point of that. If you see that needing to defend yourself against a minority that is organized and wants to make a change that you don't agree with, having to defend against that, yeah, I can see how that could feel not great, how that could feel like an attack. At the same time, it's users playing within the rules of the network and making choices. And you have a choice, too. You have a choice to oppose that. And if you really oppose that enough, you go to the effort to build the coordination to say, hey, we have to stop this. And I think a rejection of the soft fork with just a basic level of adoption would be enough for miners to just say, we're going to split either way. Because that's what rejected software does, is it guarantees the split. It says that one side is just simply not going to accept the new rules. And so you go that way, we go this way, and the status quo is just so much easier to maintain. Right. A change has to get over this inertia. Right. That everything is just working fine. So I think no matter what, we're going to find out something about the network and how it, how it operates, how it works. One nuance that kind of contributes to pushing me over the edge to actual support here is that proving that we can roll back a negative change is hugely important. One of the objections to BIP110 is that it would set a precedent for essentially unpredictability that, that if you have a set of transactions that are valid and the network can suddenly say that this set is no longer valid in the future, that it could undermine even the monetary proposition of Bitcoin, that certain use cases might not always be valid or certain implementations of transactions might not always be valid. But my pushback to that is that there's no right to a certain functionality of Bitcoin to always be working in the future. It simply has to remain in consensus. Right? But the network has every right to change what is in consensus or not. And if there's a functionality of Bitcoin that is seen to be a net negative, the network taking that away has got to be within scope.

[Podcast Host]

Because that makes sense.

[Luke DeWolf]

You think about what is a net negative, what is the worst case scenario, right? If you keep on adding net negatives, right. If you keep upgrading, adding new features and they turn out to have unforeseen consequences. Right. You keep doing that directionally, that thing, this is what you talked about for 100 years, right? That's what could break Bitcoin down is changes that slowly add new features, slowly add new things, but slowly add new ways for yeah, garbage onto the chain or, or more charitably like competition for the, the base layer from things that aren't increasing the benefits for the individual for sovereignty, things like this. That's what, that's the scenario that could happen. And so if the network isn't, isn't able to principally say we are going to draw a line here and a bad change needs to get rolled back, honestly, that's what could kill Bitcoin. And it would be the biggest case for ossification, to use the term that I've ever heard. If bit 110 fails, in my eyes,

[Podcast Host]

we should just never change anything.

[Luke DeWolf]

Another upgrade to Bitcoin is virtually impossible, at least under current conditions, because no group is going to get the level of consensus, even just on principle. Right.

[Podcast Host]

Yeah,

[Luke DeWolf]

it's really tough to see. I, I have gotten myself to the position that BIP 110 is in fact the most positive thing for Bitcoin considering the current situation. I know others disagree with me and disagree for various reasons. The governance issue is in my opinion the best one, the strongest one. It can be a negative for a minority to be able to have that control. But if it's easily counterable, well, you just gotta, you gotta have to do the work. And the thing is, Bitpoint 10 wouldn't, if it didn't have enough people to actually be like credible. You can Just ignore it. Like you don't need to. URSF from every cuckoo says, hey, I'm changing the rules of Bitcoin tomorrow. Yeah, that guy's one node, right? Like that's not compelling anything. That's not gonna get any mileage to change. No. Yeah, yeah, right. But if you get a large portion of the network large enough to say, hey, you might want to think about signaling and complying with this, then that's a threshold. Right. And that tells you something about where you would need to run some kind of resistance if you want to do that.

[Podcast Host]

Yeah. So, so, so to wrap up this, this bit of conversation here, so this is gonna drop. This episode's gonna drop on Friday, which is August 7th. And so activation day is August 7th or 8th, right?

[Luke DeWolf]

Yep, yep. So getting there.

[Podcast Host]

What, what do you think your average. Maybe eighth or ninth something, something like that. But what should your average person know about this going into this period of time? Let's say, I think there's probably going to be, maybe it's going to be figured out in a few hours. Maybe it's going to be a day or two where we're kind of taking in the information, seeing how the network is reacting, seeing how minors, everybody is reacting. Do you think the average Joe should know going into this period of time if there's a psa? To me, I think don't transact for, for a second but you know, like, or any meaningful trend. Yeah, don't transact for, you know, until the dust has settled. But yeah. What, what do you think people should know about this?

[Luke DeWolf]

You got it. Like, like, yeah, spend the next. I mean, if this is dropping on the 7th. Yeah, maybe, maybe the, maybe the messages don't transact, but you know, make any transactions you need to make before that. I do think this is going to be solved fairly quickly. I think it'll be solved in about an hour. We'll know in about an hour. BIP 110 is never catching up if it doesn't get signaling immediately. Like, like, I'm full realist here. There's, there's no signal.

[Podcast Host]

Adopt pieces of, of this proposal because it seems to me like there's some pieces that seem like closer to like shoe in good ideas and some pieces that seem closer to like, ah, is that, that a good idea? Does it set a bad precedent? You know, do you think there's a good chance that there's like a realignment after this where they go, okay, well, you guys didn't activate, but there's some good ideas Here.

[Luke DeWolf]

No, no, no, no. I don't believe that at all. I mean, I want to, I want to give as much credit as possible here to people doing development work. And I've had conversations especially I went to a Bitcoin plus plus in Vienna where basically the entire purpose was to bring together kind of, of economists, Austrian economics, economics oriented people and developers together to have conversations. And in that regard that went great. But what I got constantly from people there and at BTC Prague and online and all this was that Core made the right decision technically and they have no reason to back down. Speaking of backs, Adam said, you know, maybe it would have been socially more acceptable if they had gone with an upper turn limit of something like 256 bytes and that would have broadly solved the problem. They, they just didn't want to make another default change again in the future. Which there, there is evidence of a few things being done out of convenience in Core lately. Like it's fine to just paper over something instead of doing the work to fix it. And that's another sort of through line in defending Bitcoin is that the security, sorry, the trade off to security is convenience. So you do have to give up convenience. Every time you add a layer of security and it correlates, you have to do the work. It might be annoying, it might take work, but, but you get to a better spot generally than doing the convenient thing. Do what is do it is meaningful, not what, what is expedient, I think is the, it's in either the 12 rules for life or the, the one after that. Anyway, the. I don't think there's any chance they adopt anything from, from bip110 mostly because everything bip110 does puts constraints on development. It puts, it puts a tighter box around which developers have to work in. And I see the value in that, but a lot of people in the development space do not. And I also want to, I also want to couch this with things like lightning is completely unaffected. Like that's, like, that's really, really quite clear that lightning is completely unaffected. And ARC is a, looks to be completely unaffected. Like this big layer two that's gaining quite a bit of traction. Liquid is completely unaffected. All these established monetary focused layer twos are fine, fine.

[Podcast Host]

And what the Core people are saying just to fill people in maybe is they're saying we need this space, we need this space data wise to be able to build important functionality like layer twos and whatever. And you're saying that this sets restrictions on the data that can be added, but not in a way that infringes on people's capacity to build layer twos and monetary uses on top of that. Is that correct?

[Luke DeWolf]

Right. Well, what I even go as far as to say is that the answer that I've gotten back from more than one person is that we don't know what we're going to need. And that was entirely the point of putting in these, removing limits, putting in places to store data that don't have limits. This Taproot annex, so called is one of these things that's unlimited. You can just put as much data in there as you want intentionally and

[Podcast Host]

tell the 4 megabytes block limit. So that's it. Gotcha.

[Luke DeWolf]

That's it. Yeah. And so the, the whole thing with it is that, is that we don't know when we're going to need to use these things. We don't know when we're going to have some need for this use case. And the thing about that is that we're just so not there, you know, like.

[Podcast Host]

Well, and maybe the point is like, like how about we just don't have any more use cases? How about it's just this is the use case here it is, it's an ought let it ossify.

[Luke DeWolf]

I, I sort of, so I'll push back a little on that. Like I, I get the idea that we do need to have scaling. Like the development community really does seem to. They, they're focusing on effectively two things and, and it might sound like they're more aligned to what I am aligned with than otherwise. They're really concerned about mining centralization. But their solutions to this, the technical solutions that they have to these problems, which are the things that are under their control, are these levers of relay policy making sure that all miners get all consensus valid transactions. This is basically the crux of the core of the issue is that the, basically the whole idea of relay policy became, was going to become irrelevant. They were just going to say that a good node on the network, an ideal node on the network, just relays everything because then it reaches every miner as quickly as possible. And that's the most fair thing that prevents an unfair advantage for the largest miners. Okay, I get it. That's really noble and valuable. That's a valid framing of this issue. But it just ignores the incentive implications of what it means for Bitcoin to not have any policy limits anymore. Any kind of idea of standardness. Standardness really applies to policy, not consensus because consensus is the ultimate backstop. So what bip 110 is saying, okay, we acknowledge that this is the reality. Now that policy has changed, it's become irrelevant or somewhat irrelevant. There is evidence that a certain amount of filter in the space creates enough friction for blocks with more arbitrary data than not. But it's really, really, really minor, like extremely low currently. But, but the, the point is that, is that okay, we're going to make the change on the consensus layer then and, and, and, and put in this change so that the, the standardness rules that used to be the case, those become the consensus rules and those become the rules that all miners get access to.

[Podcast Host]

Standardness rules that used to be the case when. Before, before the policy change in 30. That's what you mean?

[Luke DeWolf]

Yeah. The, the opportunity specifically. Yeah.

[Podcast Host]

Is there a fighting? Because the, what feels to me like the biggest, the biggest danger. I don't know, one of the dangers is, is the like fighting a policy change with a consensus change retaliation. Like, and then I realized like okay, well if you fight. Yeah, what do you think of that? Because then if you refot the policy change with more policy change at the relay level, if you have 50% of transactions relaying and 50% not, then it's like they might as well all be relaying. Right.

[Luke DeWolf]

Yeah. I want to be kind here. I really think that's just a misunderstanding of how the network works. To anyone who's kind of saying that as an objection policy in a flood fill network. I sound like Adam right now a little bit. It can be dictated by a really small minority of people of actors on the network choosing to have more permissive policy. All you have to do is get a group of these more permissive people connect to the miners and they're just going to route around the entire rest of the network work. It's completely true. Completely true. Right. So you can't change a policy decision with another policy decision. Right. Because as long as you have this, this group of the network choosing to run a more permissive policy, as soon as you have that, that's in effect the status quo of the network. That's why I say that the opportunity

[Podcast Host]

change was almost like a consensus change.

[Luke DeWolf]

Yes and no, it's more like in

[Podcast Host]

effect it's not a consensus change, but it almost like affects the network as

[Luke DeWolf]

if it were, yes, the most permissive policy set of rules, standard policy set of rules that's adopted by a certain threshold of the network. It's maybe 10% of the network is needed for this to be efficient. As long as that percentage of the Network is following this set of rules. There you go, you have your new network reality. Now the argument is that against that is that miners were opening direct channels to accept transactions and that this private called private mempools and that the development developers that I've talked to say that this is such a bad thing, this is such a bad thing and we need to disincentivize that. And I just say like, okay, but again, permissionlessness, right? You can never stop them from doing that. Right. And if you have some kind of thing where you, the miner are just going to offer the service of selling your block space directly to some people and bypassing this free market, that's their choice and it's the choice of the buyers and the users. And you might have some. The, the ways of commoditizing block space might be, might be seriously underestimated like that this is just the way that the direction is going to go. I recommend listening to some podcast appearances by Bob Burnett who's thought a lot about this, that block space is really the commodity here and all this. So like miners have a different conception of this thing than the devs who are theoretically making changes to the make mining more fair. Right. And ultimately part of this issue is that I think the development community is really trying to over engineer Bitcoin in a way that just doesn't play out. When you're dealing with a network of people, you're not going to just say, well hey, we have the technical argument and here's why. And you should agree, because we're right. There's a valid disagreement here. And the one that I cite here is that a policy default is effectively a fence which is a deterrent control in physical security terms. It's something that says it's difficult. It becomes more difficult for you to break into this system because this fence is here. Now you can hop the fence, but that takes time, that takes effort. Right.

[Podcast Host]

It also takes an explicit like I am, there are rules here that I'm breaking. Here's the rule or here's the, you know, the boundary and I'm crossing.

[Luke DeWolf]

Well and the main thing is that it's sort of you stop everything that isn't able to get over that fence. Right. It's subtle, but it's like it does shape the way the network behaves. Like it's a lot easier to operate within to go. To go through the gate. Right. To go through the specific door for arbitrary data opera turn. Most oper turn was below the standardness limit. Still is actually. And so it's just a. Changes network behaviors. Right. And so I think to pull it back in on. You can't fight a policy change with consensus. Well, if the policy change hasn't effectively done a consensus change, the only layer you're left with is the consensus layer, right? If a group of people feel strongly enough about a change and the network dynamics to say that, hey, we're going to make this change on the consensus level because the. The policy is insufficient. It's just the natural next step. So I know, for example, Samson has made this argument and sorry, man, I think he's not correct here that I'm couching that with all the humility in the world that I can muster here, but I really don't think he's got it right that it is completely reasonable to say, hey, we're going to make this change in consensus to undo what was done in policy. So.

[Podcast Host]

Well, I gotta tell you, Luke, I'm excited for this conversation to be over. I'm gonna be honest. I'm excited that.

[Luke DeWolf]

No, I get it.

[Podcast Host]

Not this conversation, the BIP110 conversation, to be over, just to be clear. But, you know, maybe I'll see actually if we could drop this a day early so that people will be able to, you know, take a peek before. Before that. And then I'm looking forward to the. To the after times. Really. You know, you mentioned Samson. You said. I just thought this was an interesting tidbit. You guys, you, Knut, Samson and somebody else I believe, have a little band you guys play together with. You know, like, tell me who plays what. Tell me about that. Yeah, yeah.

[Luke DeWolf]

Knut's Fanholm is, is guitar and he sings. Samson plays guitar, I play bass. And Marty Malami is the, is the, is the drummer. And, and you might know him as the, the first developer who got in contact with Satoshi and did the like, the very first things on bitcoin. Ran the, the bitcoin talk for him for a while and now he's making like some insane, like really, really cool freedom tech stuff. Like yeah, he's, he's, he's awesome. And you, you wouldn't know it, but yeah, into, into rock and metal music and stuff. And so we mostly play Nirvana covers. We're called Nevermind, as in the M I N E D play on words and all this. But yeah, it's a lot of fun getting together with them. We play at these Satoshi Rockamoto events at various conferences. I know there's been a couple in like the states, in El Salvador and Stuff, but we mostly, since the rest of us are Europe based, we've mostly played in Prague and Lugano has been the, the place where we've gotten together the, the most often. So. But it's fun. We're all still, we're all still friends. I, I hope.

[Podcast Host]

Yeah.

[Luke DeWolf]

No ill will from my side. So it's all good.

[Podcast Host]

Yeah, yeah, yeah. I think that that's, you know, I hope that after this passes, that we can figure out ways to be like, like, you know, not everyone's not going to be happy. Right. Everyone's not going to get their way. This is how it works. But like, if we could find ways to kumbaya, bring everybody back together, you know, I want to hopefully be participating in some of that bridge building afterwards and like, you know, figuring out how and maybe hopefully to say, okay, well, so maybe bip110, maybe bip110 activates, maybe bip110 doesn't activate. But like, if we could get some people to be like, hey, like, there's a lot of people who care a lot about this, who maybe this didn't activate but have proven they can throw some weight around and let's see if we can maybe ideologically move in this direction.

[Luke DeWolf]

Yeah, I certainly hope, I don't have huge hopes, but I certainly Hope that if BIP110 fails, that it's not just open season on that kind of the core, the development community can just do whatever they want now. And I do think that no matter what happens, there's implications for bitcoin for who's in charge. I don't think Bitcoin dies if BIP110 fails. You can clip that if you want, but I don't think that's the case. I do think we need to keep going and keep on working on this project. Because why I'm here and why I believe the vast majority of bitcoiners are here is to find a form of money that can be a way out of the fiat system, create prosperity, peace throughout the world. Not in a utopian way, but truly by fixing the money. I'm here for that. I don't believe moving off to a new coin that is somehow more monetarily pure, but has fractions of the value and fractions of the individuals on it. I don't believe that's correct. I don't believe that has the same shot as what we have. I'm the pragmatist. We've got to work with what we got and we got to work with the situation we have, which is why in the next day or two after this airs, I do hope and I advocate for that. Yeah, let's push this thing through. That's the least chaotic thing here. It's temporary. It will be gone in a year. We'll have a year to assess the effects, see where to go from here. I believe it's reasonable, rational and carries the least risk.

[Podcast Host]

Yeah.

[Luke DeWolf]

So that's it.

[Podcast Host]

Yeah. And you know, sometimes it's, you know, sometimes these conversations, getting into the, into the weeds on this stuff, they're important. Sometimes they're a bit tiresome. But I think it's important to come back around to remember, like you said, the pragmatic, this, you know, taking the route that gives us the highest probability of success and success in what I think we need to remember that. I think we're moving into an age where humanity, we will all collectively decide together, are we going to, we're at a fork in the roads and are we going to go down the centralized totalitarian surveillance state route where these centralized entities have control over your life in ways that Orwell and Huxley and all of these people who left us these warnings in the past hundred years in ways they could not have imagined because of AI, because of the digital implementations of technology that allow for power to scale in ways that you just couldn't have predicted in this pre digital time. Or are we going to go down the hard fought, I was going to say bloody, but hopefully not bloody, but you know, bloody in spirit. You know, like this, like painful, hard fought, but very important battle to maintain decentralized control over the important things in our life where we don't have, we don't enter into this age of like this digital tyranny, but we enter, you know, which I think could be, could take a long time to break out of, you know, like a digital dark age, so to speak. Or we could, you know, or we can move forward and be like, wow, things are way better for everyone. Isn't this great? Like we have, there's less of the world relies on coercion and more of the world relies on cooperation. And hey, we're all on the same team. The producers and the consumers have incentive alignment in ways that, you know, weren't there before. And you know, in a governance sense for our nations, in a governance sense in tons of ways, you know, and so I think it's important to come back to be like, hey, we're in an important battle. This, you know, there will be years where we're in the way there'll be bear market years, there'll be civil war infighting years. But to zoom out and be like, hey, the greater mission here, don't lose sight of that because it's important and is worth defending as some people find it important to write books about, you know.

[Luke DeWolf]

So, yeah, completely agree. Yeah, endorse everything you just said.

[Podcast Host]

Said.

Yeah. Awesome. Awesome. I think that's a great place to wrap, man. What are some parting thoughts for people? Where can people find you? How can people support you? Plug away.

[Luke DeWolf]

Yeah, thanks a lot. I'm Luke the Wolf on X. I'm the only one easy to find and I am on Nostr and LinkedIn. If you're there, your audience probably isn't going to be there.

[Podcast Host]

But anyway, hey, we got some LinkedInners in the chat I think make.

[Luke DeWolf]

Yeah, yeah, awesome awesome. And so yeah, find me everywhere. Connect with me. Defending Bitcoin.com is where you can find information about the book Defending Bitcoin. And if you want to support me, that's 100. The best way to do that is just pick up a copy. I am making a ton of the information available though on the website for free and doing some experimenting as well with ways to make information more accessible and, and more useful things like this. So expect exciting things coming on defending Bitcoin.com but yeah, if you want to support me, pick up a copy. I appreciate it. And the other thing is at BTC hell, the, the conference that I'm one of the organizers for in Helsinki, Finland. Next edition is September 25th, 26th and we have people from both sides of the BIP110 debate coming and we might be able to do a little bit of an aftermath thing. I know it's a long way for probably most of your audience in the the in the US but, but if you're Europe based or in the Nordics or, or whatever, at least check us out. Btchell.com I put together the schedule and I think it's a, I think it's a pretty good one. So yeah, that, that's, that's the other thing that's really important to me and I mean that just kind of underlines that. Yeah, putting back in the, the local community, that's, that's what I really try to do. I'm, I'm not from Finland but, but I really, really want, want bitcoin to succeed where I live and in the place that I call home. So that's, that's what I do. There is, is that conference and I'm proud of it and and hope we can keep going so btchell.com btchel awesome.

[Podcast Host]

Yeah, right on. Yeah, we'll we'll have some links down in the description if you want to find these and yeah, thanks man. I appreciate what you do. I appreciate you taking the time and best of luck. Hopefully we'll talk.

[Luke DeWolf]

Thanks Logic yeah, this was a really great conversation. Thanks so much for having me.

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[Podcast Host]

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